Marks & Spencer may be saving itself almost £11m a year by charging customers 5p for each disposable carrier bag they use.
By reducing the number of bags given out by 80%, it has already saved almost £8.8m a year, according to The Grocer’s estimates, which are based on a 2.41p per bag cost to the retailer.
It is also set to save a further £2.2m by passing on the cost of the remaining bags to consumers. That is if the 2.41p figure, which is based on the 5p cover price minus VAT and the 1.85p profit donated to green charity Groundwork, accurately reflects its costs. If the cost to M&S is less, the retailer is making money.
M&S declined to comment on the figures. But a spokeswoman said that any procurement savings would be invested in Plan A, the company’s eco-scheme, and that the plan was expected to be “revenue-beneficial” by January 2009.
The company had incurred significant R&D costs to produce its 100%-recycled disposable bags, which no other retailer offered, she added. M&S is not the only retailer thought to be saving millions of pounds through bag reduction schemes.
The Carrier Bag Consortium, a trade body of plastic bag suppliers, estimates the cost of plastic bags to retailers at £12 to £15 per 1,000. Based on this rate, the two billion fewer bags Tesco has given out since its Green Clubcard points were launched in August 2006 have saved it up to £30m. Waitrose could save £2.3m over the next year from the 50% reduction in carrier bags given out, while Asda and Sainsbury’s also stand to gain from their reported 35% and 30% year-on-year respective bag reductions.
The reduction in bag use was timely as the cost of plastic bags had doubled in three years, according to CBC, which put the cost in 2005 at £7.50 per 1,000 bags. However, retailers were probably making losses on bags for life, which they sell for 5p to 10p including VAT, but which cost an estimated 9p to 12p to the retailer.
By reducing the number of bags given out by 80%, it has already saved almost £8.8m a year, according to The Grocer’s estimates, which are based on a 2.41p per bag cost to the retailer.
It is also set to save a further £2.2m by passing on the cost of the remaining bags to consumers. That is if the 2.41p figure, which is based on the 5p cover price minus VAT and the 1.85p profit donated to green charity Groundwork, accurately reflects its costs. If the cost to M&S is less, the retailer is making money.
M&S declined to comment on the figures. But a spokeswoman said that any procurement savings would be invested in Plan A, the company’s eco-scheme, and that the plan was expected to be “revenue-beneficial” by January 2009.
The company had incurred significant R&D costs to produce its 100%-recycled disposable bags, which no other retailer offered, she added. M&S is not the only retailer thought to be saving millions of pounds through bag reduction schemes.
The Carrier Bag Consortium, a trade body of plastic bag suppliers, estimates the cost of plastic bags to retailers at £12 to £15 per 1,000. Based on this rate, the two billion fewer bags Tesco has given out since its Green Clubcard points were launched in August 2006 have saved it up to £30m. Waitrose could save £2.3m over the next year from the 50% reduction in carrier bags given out, while Asda and Sainsbury’s also stand to gain from their reported 35% and 30% year-on-year respective bag reductions.
The reduction in bag use was timely as the cost of plastic bags had doubled in three years, according to CBC, which put the cost in 2005 at £7.50 per 1,000 bags. However, retailers were probably making losses on bags for life, which they sell for 5p to 10p including VAT, but which cost an estimated 9p to 12p to the retailer.
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